The nickel mining sector in Indonesia has become a key driver in the country’s downstream processing strategy and energy transition. With the largest nickel reserves in the world, accounting for 50.48 percent of global production and 41.97 percent of global reserves, Indonesia has successfully emerged as a pivotal player in the global critical minerals supply chain, especially for the electric vehicle (EV) battery industry. However, this economic success is accompanied by growing governance risks, power imbalances, and corruption, which are particularly relevant to understand the context of large-scale Chinese investments in this area. Our study highlights key corruption risks and governance weaknesses across the value chain of nickel mining and processing. 

In order to better understand these risks, the study maps corruption risks and governance weaknesses across the value chain of nickel mining and processing in Indonesia. The study uses the Mining Awards Corruption Risk Assessment tool (MACRA) and draws on literature review, focus group discussions, and in-depth interviews with several mining-affected communities in Weda Bay, smelter workers from Indonesia Weda Bay Industrial Park (IWIP), corporate lawyers, activists, journalists, and researchers. 

The study identifies a series of corruption risks throughout both the upstream and downstream segments of the industry. Bribery and illicit payments are commonly reported in the issuance of mining permits, a situation exacerbated by a lack of public transparency in the licensing process. Moreover, activists who speak out against environmental degradation or land seizures have faced criminalisation, while public participation in critical decision-making around land acquisition and industrial development remains minimal.